Financing a home used to be a fairly straightforward option. Buyers would pay their 25% down payment, negotiate a rate, and have it paid off in 25 years. However, now there is a wide variety of ways to pay off your home or use the equity in the home for other financial considerations. There are fixed rates, variable rates, private mortgages, second mortgages, and more. A bit of number crunching with a mortgage calculator quickly allows Oakville homeowners to see what a difference all the variables can make. Here are a couple of options that might not be on your radar.

 

 

If your financial situation isn’t working well for you, look to change it. Perhaps your financial circumstances have changed and your original payment plan doesn’t work. Perhaps you can get a better rate of interest. Perhaps you want to pay a significant part of your mortgage off. Or perhaps you want to extend your mortgage to consolidate accumulating debt or finance a renovation. These are all good reasons to refinance your home.

 

To get an accurate snapshot of the various options available and their financial implications, input the terms of your existing mortgage into a refinancing mortgage calculator that is able to compare the terms of an original mortgage with a new one. Using a mortgage calculator will give an accurate picture of the financial implications of decreasing interest rates, increasing payment frequency, shortening amortization periods etc.  Be sure to take into account any penalties or costs involved in cancelling an existing mortgage and arranging a new one.

 

 

A second mortgage is a loan secured with the equity in your home. Second mortgages can be used to consolidate debt, pay for education, to cover the costs of home renovation or university education. Again, before accumulating more debt, gather information before making a decision. Make sure you know what level of debt you are confortable with, what your monthly income and expenses are, and have an idea of your overall financial goals. A mortgage calculator can help you see the financial implications of taking on a second mortgage, by comparing rates and terms before you embark on the process. Typically, second mortgages are considered a higher risk and have a higher interest rate.

 

 

While those looking for financing often turn to the big banks, there are some good alternatives out there. Private lenders may be able to offer better terms that have more flexibility. Have a mortgage broker go over your finances and explain all the options clearly. Don’t feel rushed or pressured. Make sure you understand the implications and small print before signing anything. A great place to educate yourself on the ins and outs of home financing is the Financial Consumer Agency of Canada.

 

Punching numbers into a mortgage calculator can help Oakville homeowners begin to see the possibilities of how to best get hold of their finances. Whether you are looking to get better terms for an existing mortgage or want to use home equity to consolidate debts or finance a new venture, it’s important to be informed about all the implications.